I can be productive but I would always prefer a larger/external screen. I use a DVI/VGA thunderbolt adaptor for second monitor, and VMWare Tools/Xorg sees the additional displays as 'Virtual1, Virtual2 [..]' so xrandr 'just works'.

For the MBA specifically, the resolution is less desirable (non-retina) but the retina model just doesn't exist yet. 8GB RAM max is a bit of a limitation too but I can work around that.

AwesomeWM (tiling window manager) helps me be productive in any monitor configuration though :)